What $40 buys

April 21, 2006

Politicians facing re-election can generally be counted on to do two things: Spend money whenever possible and grant tax cuts the public can't afford. Thanks to a suddenly accommodating comptroller, Gov. Robert L. Ehrlich Jr. has completed his perfecta. Not only was he able to put all kinds of election-year goodies in the state budget, but now he's persuaded the Board of Public Works to roll back his 4.8-cent state property tax increase of 2003 by 2 cents. Looks like somebody has taken a page from the Parris N. Glendening playbook.

A tax cut sounds great. And the public always supports education, which is where much of Mr. Ehrlich's new spending is directed. But the question is, what's the long-term impact on the state budget? The answer is troubling. Shaving 2 cents off the state property tax rate saves the owner of a $200,000 home a mere $40 a year. But it eventually expands the state's projected budget deficits by a formidable $100 million a year.

Comptroller William Donald Schaefer's reversal on the matter is surprising. He had advocated for fiscal restraint and recognized the long list of unfunded needs. Certainly, it's easy to anticipate a few billion dollars worth just in the backlog of school construction and the higher cost of state employee pensions and retiree health care. But a recent statewide poll found the relatively unknown Peter Franchot, a Montgomery County delegate, within 7 points of the incumbent in the Democratic primary race for comptroller. Mr. Schaefer, who has rarely been so seriously challenged for office, may have simply cast a vote for job security.

The only dissenting voice on the three-member board was that of Maryland Treasurer Nancy K. Kopp, who is appointed, not elected, to her office. She knows that state property taxes pay service on the debt and for new capital projects.

Thanks to the tax cut, the state's capital program is now $13 million in the hole. There's been no word yet on which fiscal 2007 capital projects - schools, prisons or whatever - will have to be deferred to make up the difference.

As a candidate, Mr. Ehrlich suggested his predecessor was fiscally irresponsible. Mr. Glendening cut income taxes and committed the state to spending hundreds of millions more on education. So here's a last bit of dM-ijM-` vu: The legislature's top budget adviser now projects a billion-dollar state budget deficit by fiscal 2009. How little Maryland's incumbent politicians change.